Investors Flee Tech for Defensives as Nasdaq Turns Down 0.7% in November
Updated
Updated · CNBC · Nov 11
Investors Flee Tech for Defensives as Nasdaq Turns Down 0.7% in November
3 articles · Updated · CNBC · Nov 11
Summary
Defensive sectors have outperformed over the past month as investors cut exposure to volatile technology shares, with consumer staples, healthcare and utilities all posting broad gains.
AI-related worries over capex, cash flow, debt and execution risk have driven the shift, while Democrats' sweep of Congress last week added pressure to the sector.
Tech benchmarks have slid sharply: the Nasdaq lost 5.3% in October and remains down 0.7% in November, while MSCI World IT fell 7% in October and another 4.6% this month.
AJ Bell said IT has swung from a 28.4% first-half gain to the worst-performing sector in the second half, down more than 11%, as investors question whether the AI trade has become a bubble.
HSBC argued the rotation may be overdone, noting U.S. semiconductors trade at 13.5 times forward earnings after a 45% de-rating since June even as defensive names like Walmart approach record valuations.